Negative Option Billing

Negative Option Billing is a controversial business practice where goods or services are automatically provided and the customer must either pay for the service or specifically opt out in order to stop the deliveries and billing.

This practice often leads to customer dissatisfaction as many consumers may not realize they have been automatically enrolled in a subscription service or recurring delivery program. Negative option billing can lead to unexpected charges for the consumer, and may result in disputes, chargebacks, and damage to the merchant’s reputation.

Some jurisdictions have regulations in place that require businesses to obtain explicit consent from consumers before enrolling them in any program that involves automatic billing. Additionally, payment card networks may have specific rules and requirements related to negative option billing, such as requiring clear and conspicuous disclosure of the terms and conditions, and providing an easy way for customers to cancel the service.

Merchants that engage in negative option billing should be aware of the applicable laws and regulations, and ensure that they are in compliance in order to avoid potential legal issues and customer complaints.